Women-led businesses are up on last year and the number accessing external funding has increased, but men are still much more likely to get financial support, according to the Gender Index.
The number of female-led companies has increased and more female-led businesses secured external funding, although male-led companies secured seven times more funding, according to the annual large-scale UK-wide study into female entrepreneurship.
This year’s data from the Gender Index shows reveals continued progress in women setting up businesses, with 17.3% of all UK companies headed by females, up by 0.5% from 16.8% the previous year.
Created by the data analytics platform mnAi, The Gender Index is an AI-powered research of all 4.5 million active companies which measures the number of female-led companies and their impact on the economy.
An added layer that the mnAi analysts have incorporated into this year’s data is identifying company leadership among underrepresented groups and young people.
Ethnic minority-led companies have higher female representation in leadership roles, at 19.3% in 2022/23 compared to 19.2% last year. Similarly, across the UK, the proportion of female-led companies accessing external capital is higher in the younger age groups of Generation Z and millennials with a national average of 21.7% active female-led companies -an increase of 25% against all other types.
Geographically, Wales had the highest rate of female-led fast-growth companies across all UK devolved nations and regions, rising to 12.1% from 11.9% in 2021-22. No other UK nation has a higher proportion of females in ownership (either solely or in a mixed-gender team) than Wales – a total of 34.6%.
However, women-led businesses in Northern Ireland received the highest percentage of external capital in the UK, up by 49% in 2022/23 and the highest proportion of female-led, ethnic minority-owned companies at 20.5%.
The picture in the cities and regions is one of a North-South divide where external funding and women-led companies predominate in the South East. For the second consecutive year, London has the highest proportion of female-led companies (18.6%) and outstripped other regions securing 31.4% and 32.7% of total funding over the two years, followed by the South East at 15.3% and 13.6% respectively.
Accessing external funding and building fast-growth businesses remain a challenge for female-led companies. Of all the active UK female-led companies, less than a quarter (23.4%) accessed external capital across the UK in 2022/23, and male-led companies secured seven times more funding, averaging 70% of the total funding over the two-year period. Nevertheless, between 2021/22 and 2022/23, the overall number of active female-led companies that secured external capital in the UK rose 14.8%.
Although 145,200 new companies were created last year, the number of fast-growth active female-led companies declined in 2022/23 by 0.1% from 9.2%, compared to 9.1% the previous year.